ApplePie Capital Raises $6 Million In Series A Funding and $28 Million in Debt Capital Commitments to Fund Franchise Loans
San Francisco, April 9, 2015 – ApplePie Capital, the first marketplace lender solely dedicated to the franchise industry, today announced it has closed a $6 million Series A round led by Signia Venture Partners, with participation from Freestyle Capital and QED Investors. Also investing in the round is Ron Suber, President of Prosper, a leading consumer lending marketplace.
ApplePie Capital also announced that it has raised more than $28 million in debt capital commitments from institutional and individual investors to fund franchise loans. ApplePie Capital originates loans to franchise entrepreneurs and offers loans to investors in whole or fractionally on its franchise loan marketplace.
The Series A round, together with the debt capital commitment, will accelerate ApplePie Capital’s rapid growth and strengthen its position as the preeminent marketplace lender for the franchise industry.
“These milestones are a recognition of ApplePie Capital’s success and momentum in addressing the unique needs of the franchise industry, a market with an annual capital demand of $45 billion,” said CEO Denise Thomas. “Investors are very interested in this asset class and we plan on increasing our lending capacity as loan demand scales. We are now very well positioned to accelerate our mission of providing qualified franchise entrepreneurs with efficient access to capital to start, expand, remodel, refinance, or recapitalize their business.”
ApplePie Capital has now raised nearly $10 million in equity capital for its growth and operations. In July, the company raised $3.77 million in a seed round led by Freestyle Capital, with contributions from Signia Venture Partners, QED Investors, and angel investors.
ApplePie Capital curates high-quality investment opportunities through strong relationships with successful, well-established franchise brands. The firm has developed a proprietary, multi-factor underwriting model that examines historical brand performance, as well as borrower experience, credit quality, and financials, among other factors.
For franchisee borrowers, ApplePie Capital simplifies and expedites the funding process. By pre-qualifying franchise brands, ApplePie Capital is able to confirm borrower eligibility in 2 business days, provide a firm commitment within 5 business days, and deliver funds in under 30 days. The automated online application process features less paperwork and less hassle than is commonly experienced with traditional lenders.
“Franchise performance data is a unique information layer that ApplePie Capital understands better than any other marketplace lender,” said Zaw Thet, Partner with Signia Venture Partners. “ApplePie goes deep with franchisors across both quantitative and qualitative measures to develop a robust analysis of risk, and the early demand that ApplePie has seen from institutional investors is a strong validation of their approach.”
ApplePie Capital started making loans in January and to date has had over $40 million in capital demand from borrowers. Eleven brands have joined its marketplace, including AdvantaClean, Brain Balance Achievement Centers, Brightway Insurance, Capriotti’s Sandwich Shop, Einstein Bros Bagels, Fast-Fix Jewelry and Watch Repair, Marco’s Pizza, Nothing Bundt Cakes, Phenix Salon Suites, RNR Tire Express, and Sola Salon Studios.
“We see the development of marketplace lending as very helpful to many franchisors,” said Marco’s Pizza CFO, Ken Switzer. “ApplePie Capital fills a need and we see demand for this type financing growing very rapidly.”